OTTAWA — The federal government, concerned about soaring real estate prices in Vancouver and Toronto, announced Friday it will make buyers come up with a heftier down payment starting in mid-February.

The move was aimed at lowering risks in the housing market, though Finance Minister Bill Morneau rejected the suggestion that Ottawa fears a real estate "bubble" in the two cities.

"We are talking about ensuring that Canadians take the right approach to investing in a home. It's to protect the market for the existing homeowners and it's to protect new home buyers as well, so they have the appropriate amount of equity in their home."

Effective Feb. 15, the minimum down payment required to qualify for new Canada Mortgage and Housing Corp.-insured mortgages will jump from five to 10 per cent — though that extra five per cent will apply only to homes that cost more than $500,000 to buy.

The current minimum payment on a $500,000 house to qualify for mortgage insurance is $25,000. If the house costs $600,000, the new 10-per-cent down payment rule is levied only on the extra $100,000, bringing the minimum down payment to $35,000.

The new rule will not apply to Canadians who already hold insured mortgages, and doesn't affect sales of properties of $1 million or more because they already require 20-per-cent down payments.

Morneau, in a statement to reporters, made it clear he is targeting homes in the $500,000 to $1-million range in Metro Vancouver and Toronto.

He noted that the average price of homes sold across Canada in October was $453,000, under the new threshold.

The "benchmark" price, an estimated average, for a detached home in Greater Vancouver last month, meanwhile, was just over $1.2 million, according to the Real Estate Board of Greater Vancouver.

"Targeting higher-price properties will minimize the impact on many first-time home buyers and (on) regional housing markets where activity is more moderate, while limiting risk and taxpayer exposure to the elevated housing markets in Vancouver and in Toronto," he said in a statement.

Morneau was asked by The Vancouver Sun why the federal government is targeting buyers in cities like Vancouver, while doing nothing to deal with the alleged effect of speculators and foreign buyers driving up prices.

"You know, we are taking measured approaches to make sure we protect Canadians," he replied.

"We are looking at how we can ensure the Canadians who already have homes recognize there is a stable housing market, and those people that are aspiring to have homes can be assured that their biggest financial investment is in a stable and effective market."

Morneau got quick support Friday from economist Jock Finlayson, executive vice-president and chief policy officer at the B.C. Business Council.

"I think this move makes sense," Finlayson told The Sun. "With an almost stalled Canadian economy, policy-makers need to be looking at tools other than interest rates as a means to address concerns about overheated housing markets in some major metropolitan areas.

"This change should not affect first-time home buyers in most Canadian cities, but will affect some in the Greater Toronto and Metro Vancouver markets.

"It is a prudent measure, in my view, but it is unlikely to have a significant impact on the high end of the housing market where buyers typically have the ability to make substantial down payments."

"The motivation to the policy is clear," he wrote in a report that was released prior to Morneau's Friday morning announcement, and based on unidentified "sources."

"The attempt is to slow down the only two markets that are really moving - Toronto and Vancouver."

He cautioned that the effect will be "smaller than perceived," since both cities have a relatively larger share of properties going for more than $1 million and thus already subject to the higher, 20-per-cent down payment.

Tal's report estimated the new measures will impact just five per cent of Toronto sales and only 2.5 per cent of Vancouver sales, far below the close to 10 per cent estimate for Calgary and around 8.5 per cent in Victoria.

"This is a targeted measure designed to deter a very small segment of buyers from stretching into the market with a very low equity position," added Robert Kavcic, senior economist at BMO Capital Markets.

Kennedy Stewart, the federal New Democratic Party's B.C. caucus chair, said the change won't be successful because Ottawa isn't dealing with the real problem — the lack of government support for affordable housing.

Stewart tabled a motion in the House of Commons Friday calling on the federal government to launch a "B.C.-specific affordable housing strategy."

"Housing prices have skyrocketed in the Lower Mainland and we are facing a serious shortage of affordable housing," he said in a statement.

"British Columbians need answers as to why it is so hard for families to afford homes. We need to understand the extent that high prices are being driven by investor speculation and what the government can do to increase the supply of affordable housing."

Morneau's move Friday was part of a three-pronged effort to protect Canada from the potential risks inherent in housing prices that are expanding far more than incomes. The others are primarily technical, dealing with how lenders handle mortgages:

- The office of the Superintendent of Financial Institutions said it will consult on and "update" regulated capital requirements for residential mortgages held by federally-regulated lenders, like banks, trust companies and credit unions, and for private mortgage insurers.

CMHC data doesn't provide figures on the number of problem mortgages they have on a city-by-city basis. B.C.'s rate of 0.36 per cent of all loans in arrears (defined as being 90 days behind on payments) as of Sept. 30, 2015 is essentially the same as the 0.35 per cent national rate.

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